It’s that time of year again. Where I have the perennial argument with some clients and friends about who really owns American corporations. After all, they show me their stock certificates. That is their “proof” that they own a portion of the corporation.
For those of you who have been invested in GE for years, mostly because of its generous dividend, the times have changed. No longer will GE be providing a 4 to 5% return on your stock holdings. No, it now will be closer to a 2% dividend rate. Which is among the several reasons the stock price has tanked recently.
Way back in 1970, Dr. Milton Friedman postulated an heretical (at least for then) idea in the New York Times Magazine. (The Social Responsibility of Business is to Increase its Profits, 13 September 1970. There is no link, because it predates the internet.) The fact that it took hold over corporate thinking was, to me, amazing.
Continue reading A turning point?
More than a few years ago, my youngest daughter (and my youngest for a very, very, very long time, until the surprise of a new brother) arrived.
Over the years, we’ve considered raising money from VC, going public, or simply bootstrapping. To be honest, the most frequent process we’ve started new companies has been bootstrapping. In so doing, we maintained total control of the firms. And, when we finally exceeded our ability to grow the firm (or in more than a few cases, proved our concept and no longer had the desire to run the firm), we’ve sold the entity to others.
Many tech startups find ways to reward their initial complement of employees with stock in their nascent venture. As and if the company succeeds, that stock award often renders these folks wealthy beyond their imagination. (Our firms were tech-type firms; we never went public, but did award phantom stock to our initial crew- and continually to our key staff. It was a way for those folks to garner benefits as we grew. [OK. We did have one firm that almost went public, but the underwriters absconded with the funds. All we were left with was egg on faces- and a series of discussions with federal and state regulators.])
Continue reading What’s behind the curtain?
We’ve been reading and hearing that corporations are raking it in. Yet, we also know that jobs growth- real jobs (not just part-time or temporary or low paying)- are not keeping pace. Oh sure, the top 0.1% are seeing income gains. And, the top 1 or 2%, those that have enough cash to invest in corporations, have been participating in the stock market boom.
Continue reading Labor gets the shaft
A few days ago, I described a meeting I attended- on social responsibility. (I wrote about it here.) It made me consider how the firms I have started and been involved with would qualify by those metrics.
Continue reading Did that model apply?
I have a good friend who shares dinner with me often. And, we often argue. (No, we don’t fight; there’s a vast difference. We have different politics- and can still learn from one another.) One of the recurring arguments is his belief that when he buys stock in a company, he actually owns a part of it.
Continue reading Do you own that company- or not?
Before I begin today’s blog, I should tell you that I am a real Chrysler fan. My car rental agency only handled their vehicles. Chrysler was the firm with the best engineering in the business; maybe, not the best designs always, but… (I also stopped being an exclusive Chrysler guy when Mercedes Benz took them over.) And, now, as you can see from the pictures, Chrysler is back in the news.
Continue reading A peek behind the Chrysler curtains…
